intergenerational income mobility

Abstract

One important aspect of income inequality is the extent to which position in the income distribution is passed from parents to children. Theoretical models suggest that both intergenerational persistence and equilibrium income inequality increase with the responsiveness of earnings to human capital investment and with the heritability of income-generating traits, and decrease with the progressivity of public investment in children's human capital. A rapidly growing empirical literature is documenting the extent of intergenerational income mobility in many countries and is beginning to explore why intergenerational transmission is as high (and low) as it is.